United States District Court, N.D. Alabama, Southern Division
H. ENGLAND, III UNITED STATES MAGISTRATE JUDGE
Shayla Smith (“Smith”) initiated this action
against RJC, LLC d/b/a Denny's Restaurant
(“RJC”) asserting violations of Title VII of the
Civil Rights Act of 1964, 42 U.S.C. § 2000(e) et
seq. (Doc. 1). Specifically, Smith contends RJC
subjected her to a hostile work environment (sexual
harassment) and terminated her employment in retaliation for
opposing conduct made unlawful by Title VII. (Id.).
RJC has moved to compel arbitration and dismiss this action.
(Docs. 5 & 6). Although Smith did not file a response
before expiration of the extended deadline (docs. 8, 18),
Smith has informed the court she agrees her claims should be
submitted to arbitration (doc. 21). The motion is therefore
ripe for review. For the reasons stated below, RJC's
motion to compel arbitration and dismiss (doc. 5) is due to
owns and operates a Denny's Restaurant in Birmingham,
Alabama, where Smith worked in 2016 and 2017. (Doc. 1 at
¶¶ 13- 28; doc. 6-1 at ¶¶ 2-3). RJC and
Smith entered into an arbitration agreement that requires
them to submit work-related claims to binding arbitration.
(Docs.6-1 at ¶¶ 4-6; doc. 6-2). Specifically, the
agreement provided as follows:
Any and all claims between you and the Company that have
been through Steps 1 and 2 above and are still not resolved
are subject to arbitration except workers'
compensation claims, claims for unemployment benefits,
and OSHA claims. This includes without limitation:
claims for breach of contract (express or implied), negligent
or intentional emotional distress, slander, defamation,
negligent or intentional misrepresentation, negligent or
intentional interference with contract, tort claims,
harassment claims, discrimination claims, retaliation claims,
wage claims, wrongful discharge claims, and benefits claims.
This mediation requirement applies to any claim under any
employment statute, including but not limited to, any claim
under Title VII of the Civil Rights Act of 1964 (Title VII),
the Immigration Reform and Control Act of 1986 (IRCA), the
Americans With Disabilities Act of 1990 (ADA), the Equal Pay
Act of 1963 (EPA), the Age Discrimination in Employment Act
of 1967 (ADEA), the Employment Retirement Income Security Act
(ERISA), the Fair Labor Standards Act (FLSA), the Family and
Medical Leave Act (FMLA), any other analogous laws of the
state in which Employee works or worked for the Company, and
any and all other federal, state and local laws and
regulations relating to employment. EMPLOYEE
UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EMPLOYEE IS
GIVING UP THE RIGHT TO A JURY TRIAL. CLASS OR COLLECTIVE
ACTIONS SHALL NOT BE PERMITTED IN ARBITRATION.
(Docs.6-1 at ¶¶ 4-6; doc. 6-2). This Arbitration
Agreement Smith signed also provides as follows:
BY SIGNING THIS EMPLOYMENT DISPUTE RESOLUTION
AGREEMENT, EMPLOYEE IS AGREEING TO HANDLE ALL DISPUTES HE OR
SHE MAY HAVE WITH THE COMPANY THROUGH THIS DISPUTE RESOLUTION
PROGRAM INSTEAD OF THROUGH COURT LITIGATION. BOTH THE
EMPLOYEE AND THE COMPANY ARE GIVING UP THE RIGHT TO HAVE A
JURY OR JUDGE DECIDE ANY DISPUTES BETWEEN THEM. CLASS OR
COLLECTIVE ACTIONS SHALL NOT BE PERMITTED IN ARBITRATION. I
UNDERSTAND THAT I AM GIVING UP MY RIGHT TO A JURY TRIAL WITH
RESPECT TO ANY CLAIMS I MAY HAVE AGAINST THE
(Doc. 6-1 at ¶ 6; doc. 6-2). Additionally, the
Arbitration Agreement between RJC and Smith contains specific
arbitration rules based on the American Arbitration
Association's Employment Dispute Resolution Rules (the
“AAA Rules”). (Doc. 6-1 ¶¶ 5-6; doc.
Smith's Claims Should Be Resolved Through
arbitration agreement is specifically enforceable under the
Federal Arbitration Act if the following requirements are
met: (1) the existence of a written agreement to arbitrate
claims; (2) a nexus to interstate commerce; and (3) coverage
of the claims by the arbitration clause. 9 U.S.C. § 2.
Each of these elements is satisfied in this case
provided a written agreement to arbitrate claims. (Doc. 6-2).
This Arbitration Agreements was supported by adequate
consideration, i.e., RJC's reciprocal agreement to be
bound to arbitrate employment-related claims in exchange for
Smith's employment. See Wright v. Circuit City
Stores, Inc., 82 F.Supp.2d 1279, 1284 (N.D. Ala. 2000)
(finding consideration existed by virtue of mutuality of
agreement to arbitrate claims arising out of employment).
Smith agreed to be bound by the Arbitration Agreement by
signing the agreement and accepting employment with RJC, and
adequate consideration existed for each of their acceptance
of the terms set forth in the Arbitration Agreement.
Additionally, the Arbitration Agreement lacks any aspects of
substantive unconscionability. Under Alabama law, an
agreement is unconscionable when “(1) terms [ ] are
grossly favorable to a party that has (2) overwhelming
bargaining power.” Scrutu v. Int'l Student
Exch., 523 F.Supp.2d 1313, 1323 (S.D. Ala. 2007)
(citation omitted). Here, there is nothing to suggest the
Arbitration Agreement is substantively unconscionable.
See Id. at n.11 (citing Patriot Mfg., Inc. v.
Dixon, 399 F.Supp.2d 1298, 1311 (S.D. Ala. 2005)).
the Arbitration Agreement has a nexus to interstate commerce.
RJC is headquartered in California and operates restaurants
in several states across the country and RJC contracts for
products for use at its Birmingham restaurant that are
shipped in interstate commerce. (Doc. 6-1 at ¶¶ 2,
7). Accordingly, the arbitration agreement has the requisite
nexus to interstate commerce required by the FAA. See
Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp.,
460 U.S. 1, 24 (1983) (citing 9 U.S.C. § 2).
Smith's Title VII employment claims are covered by the
arbitration agreement, as the arbitration agreement
specifically provides that “[a]ny and all claims
between you and the Company . . . are subject to arbitration.
. . . This includes without limitation . . . any claim under
Title VII of the Civil Rights Act of 1964 . . . and any other
analogous laws of the state . . . any and all other ...